Home staging tells homeowners how to prepare and market their home for sales in the real estate market. Professional home stagers are professionals that help you in preparing your home for sale. They help you create a very good first impression on potential homebuyers by taking care of your house and its appeal.
Professional home stagers rearrange your home’s furniture, making it more organized. They help you redesign your house so that it appeals to potential homebuyers in the market. They can also suggest and in some cases, purchase furniture or fixtures to make your home show it’s absolute best!
To put it differently, they make your house sellable with their design experience and expertise. Home staging is particularly useful where prices appreciate slowly and finding a buyer takes a lot of time.
The Home Staging Process
The first impression is the key to a good offer (read: high price) and quick sale. Most buyers make up their mind even before entering the house! That is why it becomes so vital to create a winning first impression. A real estate agent may be good at marketing your house, he/she may know what makes it sell but in all probability he may not be able to help you do it. This is where professional home stagers come in. They help you prepare your house for the best first impact.
Zeroing in on a professional home stager is not difficult. You can ask your friends and acquaintances who have recently sold a house for reference. Your real estate agent or company can also help you in this regard. In all probability they might have already utilized the services of the professional home stagers in your area.
Once you have zeroed in on a few home stagers, the next step is to find out the cost. It is always good to get an estimate from a few home stagers. Mostly it is a quick and accurate process. You should then make calculations and comparisons. It is always a good idea to discuss estimates with them before making a final decision.
It is also important to take into account others factors like the state of your home, asking price and average time the houses are on sale before a deal is clinched. Asking price is the most important factor. If the asking price is low, it may not be feasible to hire professional home stager, more so when the higher price is not in tandem with the cost involved. All these factors go a long way in helping you make an informed decision of hiring a professional home stager.
On occasion your real estate agent may also contribute to the charges of your professional home stager. This is done when your real estate agent is convinced that the charges are reasonable and the investment is worthwhile.
Doing It On Your Own
If you don’t want to spend money and hire professionals you can do home staging on your own. Here are few tips on do-it-yourself home staging:
1) Clean your house, yard, kitchen bathrooms, drapes, and carpets. Wash the windows.
2) Make your home organized and less cluttered. This will make your home look neat and spacious. Remove all the unnecessary objects.
3) Get your home repainted.
4) Check the floor. It might need refinishing.
5) Change furniture and fixtures to make your house more appealing. You can buy try borrowing or renting.
6) Remove unnecessary pictures. Rearrange others.
Home staging can help your house sell faster and at a better price than you probably would be able to without any preparation. The thing to remember is that your home should appeal to a wide variety of buyers. The best way to do this is to use neutral colors and rich fabrics.
As you grow older, the issue of wealth building comes front and center. Wealth building simply refers to increasing the net value of your total assets. Wealth building over time is one of the advantages of home ownership.
Building Equity
Owning a home can help you build wealth in two ways. First, you build equity by paying down your mortgage. A certain percentage of each mortgage payment goes towards a reduction in the total amount owed. Typically, payments in the first few years of the mortgage are primarily applied to interest on the loans. As time passes, however, more and more of each payment is applied to the outstanding loan amount. Before you know it, the $300,000 loan is down to $50,000 and you’ve gained $250,000 in wealth.
Appreciation is the second wealth building advantage to home ownership. Each year, the value of your home will increase or decrease slightly based on market prices. Over time, real estate has always appreciated in value. In the current market, homes in some parts of the country are appreciating at rates as high as fifteen to twenty percent! Appreciation is a very popular subject with homeowners.
Wealth Building Example
Let’s look at a simple demonstration of how advantageous home ownership can be. Assume you buy a home in 2005 for $400,000 and, for the purpose of simply mathematics, pay no down. Over the next 10 years, your mortgage payments reduce the outstanding mortgage by $100,000 and the home increases in value to $600,000. The value of your home as a net asset has grown to $300,000 [$600,000 minus $300,000]! If you had rented during this period, you would have missed out on $300,000 in wealth. This simple example should show you the advantage of home ownership.
Historically, home ownership is one the best ways for families to build wealth. If you don’t currently own a home, you should start looking for one.
From top-dollar homes in the San Francisco Bay Area to sprawling mountain homes in the Colorado Rockies, discriminating homeowners are demanding custom designs and finishes in their kitchens. In particular, they are looking to express their individuality and distinct design preferences with the fast growing design material of choice — concrete.
In fact, concrete countertops have become somewhat of a status symbol for kitchens, rivaling granite and other high-end countertop surface options. Consumer Reports Magazine (August 2004) ranked concrete highest for its “customization” and “exclusivity” among high-end kitchen countertops.
As a custom product, the amount of time and craftsmanship required to produce concrete countertops places them as the most labor-intensive and priciest among leading countertop materials.
However, concrete countertops are becoming more accessible for those on a modest budget. The latest do-it-yourself (DIY) trend to captivate homeowners and builders is building your own concrete countertop. This phenomenon has gained popularity largely due to Cheng’s best-selling book Concrete Countertops: Design, Forms, and Finishes for the New Kitchen and Bath (Taunton Press, 2002). According to Cheng, there is little monetary investment in making concrete countertops, yet the creative gains of working with concrete are plentiful.
THE SHOWSTOPPER
Increasingly, homeowners are moving away from the monotonous, manufactured look of traditional countertop surfaces and choosing concrete for its earthy, timeless appeal. Plus, the options for personalizing concrete countertops are endless: one can color, polish, stamp and stain concrete or imbed personal objects like stones, seashells and fossils into the countertop’s surface, adding sentiment and character. Functional features such as drain boards, soap dishes, and trivets can also be incorporated to suit the homeowners’ own needs and lifestyle.
Concrete is slowly becoming demystified as characteristically cold and industrial. In contrary, this age-old material is warm and surprisingly tactile; people cannot help but touch their smooth, polished surfaces. Real estate agent Joy Rasmussen, who has recently sold her mountain home — a short-term investment property in Steamboat Springs, CO — recounts her visitors’ experiences with concrete: “When I had open houses, visitors gravitated to the concrete countertops — many people around here have never seen them”.
Joy’s 2,265 sq. ft. mountain home was custom build by her husband, Ken Otterman, along with KJ Otterman, president of Classic Special Custom Homes. They built pour-in-place concrete counters for the home’s kitchen and three bathrooms by using Concrete Countertops as their guide. The sand-colored concrete countertops were polished smooth, then paired with natural slate of varying colors — like charcoal, rust and gold tones — that forms the backsplashes in the kitchen and baths. As a design accent, small rectangular slate tiles were added to the rim of the bathroom sinks, which provided a unique detail to the custom vanities.
When Joy and Ken decided to sell their house, their investment in concrete countertops proved its value. “We were able to list the house $20,000 over market value, and had no problems selling it,” comments Joy, while discussing the long list of upgrades throughout their house, including knotty pine solid doors, natural slate wall accents and hardwood floors. “The concrete countertops were easily the most unique and impressive of all the finishes. I believe they were a huge part in adding value to the home. Around here, all you see in homes are granite countertops —and I really think homebuyers are getting quite numb with granite.”
“Concrete countertops are a unique offering to homebuyers who see the same finishes used in house after house they visit,” explains Joy, offering her observation as a seasoned realtor. “Having concrete countertops almost gives you bragging rights — you have something different from your neighbors.”
BREAKING THE MOLD
Another advantage of concrete is its adaptability in either modern or traditional settings, especially when coupled with other materials like varied metals, wood or stone. “Concrete adds so many [possibilities] to stone, and the combination with slate, which is hugely popular here, gives the mountain homes an overall warm, natural touch,” says Joy.
Joy and Ken have since built a much larger home (4,000 sq. ft.) that offers expansive views of the Steamboat Ski Resort and is meant to serve as a long-term investment for the couple. They’ve also expanded their list of custom finishes, including hand-troweled walls, elegant oil-rubbed bronze hardware, knotty pine doors that arch at the top, cabinets in a natural, knotty alder, and their favorite — concrete kitchen countertops.
Unlike in their previous home, KJ and his specialty crew poured charcoal-colored countertops using the pre-cast method in the unfinished basement of the new home. Before pouring the concrete, they sprinkled an array of semi-precious stones in the mold including Leopardskin, Moonstone, Mother-of-Pearl and Turquoise. After the surface was ground and lightly polished, the finished result was an impressive blend of colors, “By far, the Mother-of-Pearl was the most incredible,” says Joy.
The L-shaped concrete countertop has a rough, rustic stone appearance, complementing its rugged country surroundings. An integral drain board and trivets provides function and added interest to the concrete countertop. Natural slate backsplashes, distinct wall accents, and a butcher block countertop at the kitchen island all resonate with the traditional warmth and earthiness of the concrete countertops.
Joy and Ken’s respective backgrounds in real estate and custom homebuilding, and as investment homebuyers, have helped them realize that concrete countertops can add tremendous aesthetic and financial value to a home. Concrete’s customization and “show-stopping” appeal is like no other countertop surface. Cheng is a proponent of emotional aesthetics and building homes that capture these emotions, as in the case of Joy and Ken Otterman. Cheng concludes: “People really want differentiation, something personal, something custom – and concrete can do that for them.”
You can purchase property for cash, of course, and if you have it, this can be the best way to get a great price. What if you don’t have the cash? Here are some of you other options.
Partner To Purchase Property
Join the local real estate investing group in your town. Then start taking notes, names, and numbers. Our group here in Tucson meets once a month. The best part of the meeting is the “I have / I want” part, where anyone can stand up and tell the rest what they are looking for, or what they have to sell. I have a list of people now that are looking for everything from mobile home parks to fixer-upper homes.
How do you use this information to purchase property? Here is one of several ways: Make an offer on a property, and include in the offer the right to assign to someone else or bring in a partner. Call the people on your list until you find one that will put up the down payment or arrange financing as a partner.
I announced that I had some money at one meeting, and three days later got a call from a couple that had the financing and down payment on a project arranged, but needed a partner to bring in the money to rehab the property. If the deal is good, you can find the money. If you don’t have a real estate investors group nearby? Start one.
The Two-Note Technique
This creative way to purchase property sounds more complex than it is. You make an offer for, let’s say, $360,000 on a rental property, when the seller is asking only $350,000. Why, if the seller is asking $355,000 and probably only expects to get $340,000, do you offer more than the asking price? Because the seller will be financing the whole deal, and he needs cash, so you’ll be selling one of the loan notes. Let me explain.
You offer two mortgage notes, one for $300,000, and the other for $60,000. The payments on the first might be around $2,000, and $400 per month on the second. You’ll have total payments of $2,400 per month (Be sure you still have cash flow). As part of the offer, you arranged for the sale of the second note at closing for $45,000. That’s all a note investor is likely to pay for an “unseasoned note”. The seller gets $45,000 in cash, and payments of $2,000 every month for 30 years. The note investor gets your other payment of $400/month.
The numbers will be all different in every deal of this sort. Maybe you have some cash. Maybe the seller needs more cash, so the second note will have to be for a higher amount. Interest rates, balloons, and your credit rating all affect what a note buyer will pay for the note too. The point is that you can create cash out of seller financing, meaning you can purchase property with nothing down, or with less down.
No-Doc Loans
These loans used to be harder to find, and may still be in your area, but they’re everywhere around here right now. The idea is that you don’t need documentation of a job or even income, hence the name “no-doc.” The bank loans based on your credit score and the property. I can get 95% financing on a $300,000 house without any job or income right now.
The catch, apart from needing either great credit or a larger down payment, is that the interest rate will be higher. Now, suppose you find a $100,000 fixer-upper and can put the $5,000 down payment and the repairs on your credit cards. In this case, the few thousand in interest over the six months you own the house isn’t much if you intend to make a $25,000 profit.
On the other hand, the higher interest will really add up if you are going to live in the house for 30 years. At the moment, the banks around here seem to want about 2% more for these loans than for conventional mortgage loans, and that is a lot of extra interest over the years. Bottom line? No one way is right in all cases. That’s why you need to know many ways to purchase property.
Many people ask “what is fractional ownership?” and the closely related question “Is it timeshare? In this article I will attempt to answer these questions. This article is concerned exclusively with the fractional ownership of leisure/luxury assets. However most of the principles would apply equally to the fractional ownership of a practical item (e.g. for business).
Definition of Fractional Ownership
In its broadest definition, fractional ownership is any arrangement where a group of people (numbering from 2 to 10 or more) share the ownership of an asset and also share certain rights to use the asset. The use of the word “ownership” in the definition therefore excludes timeshare arrangements, where there is no ownership of the underlying asset. Unfortunately however, some so-called fractional ownership schemes are closer to timeshare than they are to true fractional ownership. When investigating whether to purchase a fraction it is essential to know what your relationship to the asset purchased is. The best arrangement is to be identified as the legal joint owner of the asset (or in the case of multiple assets, the owning organization).
Types of Fractional Ownership
The most cost-effective form is where a group of individuals decide to purchase an asset jointly. They then decide on the exact asset to be purchased, draw up ownership documents (perhaps with the help of a legal firm) and purchase and manage the asset themselves. This avoids the sometimes substantial profit-margin that developers charge when selling fractional properties. This approach does have disadvantages, e.g. the amount of paperwork involved and the possibility of falling out with your fellow fraction owners (over cleaning, maintenance etc.)
Second in terms of cost-effectiveness would be a developer or owner-led scheme, where the individual fractions were being sold direct from the developer/owner (but where there were no expensive additional services bundled with the purchase). There will have to be a profit-margin associated with this type of arrangement, since the developer/owner is incurring additional legal and administrative costs. If fractions can be sold individually (without all the fractions of an asset being sold) then they are also taking the risk of having unsold fractions tying up their capital.
The above schemes blur into the next category, which I will call clubs. These are sometimes called Ownership Clubs, Private Residence Clubs, Destination Clubs etc. etc. Where they differ from simple developer/owner-led schemes is in the level of luxury/services provided and (sometimes) in the level of ownership. None of these terms have a particular legal meaning so it is up to the purchaser to investigate issues of ownership, booking arrangements, exit arrangements etc. A the extreme end of this group there are some similarities with Timeshare -so be warned!
How Much is it Costing Me?
Here I don’t mean in absolute terms, I mean how much is it costing in excess of the amount that I would have paid for the asset as a whole. Always try and do a comparison with a similar asset purchased outright to gain an idea of what the developer/owner’s additional costs and profits are. At the very least it might help you to negotiate a better price if you do decide to buy! You can and should do a similar comparison on the management fees (and pay special attention to any rights to vary them in the future).
Conclusion
True fractional ownership isn’t timeshare, but some of the schemes marketed as fractional ownership are. Be warned and do your homework if thinking about purchasing. if thinking about purchasing.
Property taxes are one of the largest line item costs incurred by apartment owners. However, many owners do not appeal effectively. Even though owners realize that property taxes can be managed and reduced through an appeal, some view taxes as an arbitrary estimate provided by the government which can’t effectively be appealed. It tends to boil down to the old adage, “You can’t fight city hall”.
Fortunately, the property tax appeal process in Texas provides owners multiple opportunities to appeal. Handled either directly by the owner or by a property tax consultant, this process should involve an intense effort to annually appeal and minimize property taxes. Reducing the largest line item expense has a significant effect in reducing the owner’s overall operating expenses. While it is not possible to entirely escape the burden of paying property taxes, it is possible to reduce taxes sharply, often by 25% to 50%.
Why some owners don’t appeal
Some property owners don’t appeal because they either don’t understand the process, or don’t understand that there is a good probability of achieving meaningful reductions in property taxes. Some owners believe that since the market value of their property exceeds the assessed value, then it is not possible to appeal and reduce the property taxes. Although appeals on unequal appraisal are relatively new, there is a clear-cut way to appeal property taxes at the administrative hearing level based on unequal appraisal. Unequal appraisal occurs when property is assessed inconsistently with neighboring properties or comparable properties. Also, some owners are reluctant to hire a property tax consultant, even though many consultants will work on a contingent fee basis, in which there is no cost to the owner unless property taxes for the current year are reduced.
Overview of appeal process
The following are the primary steps in the annual process for appealing property taxes:
Request notice of accessed value
File an appeal
Prepare for hearing
Review records
Review market value appeal
Review unequal appraisal appeal
Set negotiating perimeters
Administrative hearings
Decide whether binding arbitration or judicial appeals are warranted
Pay taxes timely
Requesting a notice of assessed value
Property owners have the option of requesting a notice of assessed value for their property annually. Section 25.19g of the Texas Property Tax Code provides the owner the option to request a written notice of the assessed value from the chief appraiser. Owners benefit from requesting and receiving a written notice of assessed value for each property because it ensures they have an opportunity to review the assessed value. This notice should be sent on an annual basis. The appraisal district does not have to send a notice of assessed value if the value increases by less than $1,000. However, if an owner was not satisfied with a prior year’s value and the value remained the same, the appraisal district probably will not send a notice of the assessed value for the current year. In this situation, the owner might forget to protest since a notice of assessed value for the property was not received.
How to file and appeal
On or before May 31st of each year, the property owner should file an appeal for each property. However, while many owners are comfortable with an assessed value, in many cases there is a basis for appealing. Two options for appealing include:
1. unequal appraisal, and
2. market value based on data the appraisal district provides to the owner before the hearing.
You can appeal by completing the protest form provided by the appraisal district and indicating both excessive value (market value) and unequal appraisal as the basis for appeal. In addition, the property owner can simply send a notice that identifies the property, and indicates dissatisfaction with some determination of the appraisal office. The notice does not need to be on an official form, although the comptroller does provide a form for the convenience of property owners. (You can access the protest form at www.cutmytaxes.com .)
House Bill 201 – helpful information
House Bill 201 is the industry jargon for a property owner’s option to request information the appraisal district will use at the hearing, and to receive a copy 14 days before the hearing. The name House Bill 201 is derived from the bill used to enact the law. The details for House Bill 201 are located in sections 41.461 and 41.67d of the Texas Property Tax Code. When filing a protest, the property owner should additionally request in writing that the appraisal district provide a copy of any information the appraisal district plans to introduce at the hearing. The appraisal district will typically require the property owner to come to the appraisal district office to pick up the information and charge a nominal fee, typically $0.10 per page. While the cost for House Bill 201 requests are quite low (typically $0.50 to $2.00 per property for residential and commercial) the information is invaluable in preparing for the hearing. In addition, filing a House Bill 201 request is important because it limits the information the appraisal district can present at the hearing to what was provided to the property owner two weeks before the hearing.
Preparing for the Hearing
Start by reviewing the appraisal district’s information for your property for accuracy. If the appraisal district overstates either the quality or quantity of improvements, this will justify a deduction. The next step is to review the information on market value and unequal appraisal provided by the appraisal district in the House Bill 201 package. If the subject property is an income property, review the appraisal district’s income analysis versus your actual income and expense statements. Consider the following areas as opportunities to rebut the appraisal district’s analysis:
Gross potential income
Vacancy rate
Total effective gross income, including other income
Operating expenses
Amount of replacement reserves
Net operating income
Capitalization rate
Final market value
Many property owners and consultants start with the actual income and expense data, and use one or two of the assumptions provided by the appraisal district. However, they primarily utilize information from the actual income and expenses in preparing their own income analysis and estimate of market value for the subject property.
When comparable sales are the primary issue in determining market value, start by reviewing the comparable sales data provided by the appraisal district versus the assessed value for your property. Convert the sales prices from the appraisal district to either a per square foot or per unit basis. Then compare the sales to the per square foot or per unit assessment for your property. Sales can be helpful during the hearing.
The cost approach is not typically used in the property tax hearings except for brand new or relatively new properties. If your property is new, the appraisal district will probably want to review the cost information and you probably won’t want to show it to them. In many cases, the actual cost of a property is higher than the estimate provided by the appraisal district. If this is the case, you will likely want to appeal on unequal appraisal instead of on market value. No matter how good your argument or how passionately it is expressed, the appraisal district staff and Appraisal Review Board (ARB) members tend to believe that cost equals value for new properties.
Deferred Maintenance and Functional Obsolescence
Another issue that is important for the market value appeal, and to some extent for a unequal appraisal appeal, is information on deferred maintenance and functional obsolescence. Deferred maintenance could include items such as:
rotten wood
peeling paint
roof replacement
substantial repair
landscaping updating and other similar items
Most appraisal districts give minimal consideration to requests for adjustments based on deferred maintenance, unless the property owner provides repair costs from independent contractors. There are some exceptions where a cooperative informal appraiser or sympathetic ARB will take an owner’s estimate of deferred maintenance and make adjustments based on those costs. Most appraisers and ARB members are much more inclined to make adjustments if third-party cost estimates are provided. In addition, the appraisers and many ARB members are inclined to only deduct a portion of the total cost using the argument, “we’ve been giving a replacement reserve allowance for this item for the past years and it’d be double-dipping to deduct the whole value off it in the current year.” While this is an incorrect appraisal argument, it does tend to be the practice at many appraisal districts. The reality is, the cost of curing deferred maintenance is deducted from the offer by a prospective buyer.
Examples of functional obsolescence would be a three-bedroom apartment unit that only has one bathroom, or a two-bedroom apartment that does not have washer/dryer connections in an area where those connections are common. Another example would be an apartment that has a window air conditioner in an area where central HVAC is typical and expected.
Unequal appraisal analysis
The Texas Property Tax Code, section 41.43(b)(3), provides for appraising or appealing on unequal appraisal including ratio studies and “a reasonable number of comparable properties appropriately adjusted.” Virtually all unequal appraisal appeals involve a reasonable number of comparables that are appropriately adjusted. Comparables are similar properties.
This is primarily because of the difficulty and cost of performing a ratio study. Historically, the position of many appraisal districts was that the property owner needed to get a fee appraisal for each comparable property and compare the market value estimated by the appraiser to the assessed value. The cost of getting multiple appraisals made this process financially impractical. Compiling a reasonable number of comparables appropriately adjusted is simple and straightforward. The first step is to choose a reasonable number of comparables. Usually four to five comparables is the typical number used at a property tax hearing, but in some cases, property owners choose ten to thirty. In some cases, there may only be one to four comparable properties that merit consideration. Most unequal appraisal presentations include three to ten comparables. The number of reasonable comparables depends on the location, type, size and age of the property. For example, there would be fewer five-year-old bowling alleys in the northern part of Harris County compared to recently built apartment complexes.
After choosing a reasonable number of comparables, array them in a table format, including fields of data such as account number, net rentable area, year built, street address, assessed value and assessed value per square foot.
You should also review the information in the appraisal district’s House Bill 201 packet on an unequal appraisal. In many cases, the appraisal districts unequal appraisal analysis will document a reduction in your assessed value! If the appraisal districts unequal appraisal analysis documents a reduction, either the informal appraiser or the ARB should make the adjustment in assessed value for you. Having the opportunity to get an assessed value reduced automatically based on the appraisal districts unequal appraisal analysis is one of the reasons to appeal every property every year.
Completing Hearing Preparation
After reviewing the appraisal district’s information on your property, the House Bill 201 package, and your market value and unequal appraisal analyses, determine the strengths and weaknesses of each approach and decide which basis of appeal provides the best opportunity for a meaningful reduction. Although appeals on unequal appraisal have clearly been the law of the land since 2003, some appraisal districts and review boards have chosen to disregard the option for unequal appraisal put forth by the Texas Legislature. Although there is litigation underway which should resolve this issue within the next year, it would be prudent to visit someone who is knowledgeable in local property tax appeals to determine whether the county appraisal district and ARB in your area are considering appeals on unequal appraisal.
Set Negotiating Perimeters
After reviewing the information, it is important to set the highest level of assessed value you will accept at the informal hearing because after you accept an assessed value, the appeal process will be complete for the year and you will not be able to appeal further.
Administrative Hearing Process
The two steps to the administrative hearing process are the informal hearing and the appraisal review board hearing.
The Informal Hearing
The following procedure and rules are typical at the informal hearing:
· Meet with an appraiser representing the appraisal district. You should be polite and prepared at this meeting. While many property owners are frustrated and angry at the high level of real estate taxes, the appraisal district appraiser does not control the tax rate set by various entities nor the policy regarding property taxes in the area or the state. The appraisal district appraiser is trying to execute his job in a professional manner and appreciates it when property owners work with him on that basis.
· Provide the appraiser information on your property and he will review that information and information he has available.
· The appraiser will likely make an offer to settle the assessed value of your property fairly quickly. You can either accept the value or negotiate further. Either way, you should know within ten to twenty minutes whether the appraiser will offer an acceptable value. If the value is acceptable, conclude the negotiation by agreeing to the value for the current year. If the value offered is not acceptable, ask to go forward with an ARB hearing.
Appraisal Review Board Hearing (ARB)
The ARB hearing panel consists of three impartial citizens selected and paid by the appraisal district. The age of most ARB members ranges from fifty to eighty. There is an unfortunate bias in the system since the ARB members are selected and paid by the appraisal district, but most ARB members are reasonable people who want to make appropriate decisions.
Like the appraisal district appraiser, the ARB does not set tax rates or tax policy. The members are also not responsible for the effectiveness of local government. It is unlikely to help your case if you complain to the ARB members about either the high level of property taxes or the poor quality of some aspect of local government.
The ARB will expect you to make your presentation in about three to ten minutes. They will typically wait patiently while you make your presentation and may have questions after you conclude. An appraiser from the appraisal district, who may or may not be the same person who attended the informal hearing, will represent the appraisal district at the ARB hearing. The appraiser will comment on the evidence you presented and will often present other information the appraisal district has available. If you requested a House Bill 201 package for your property, it substantially limits the evidence the appraisal district appraiser can offer at the hearing. The ARB members may have questions after the appraisers presentation. Then the property owner will be given a final opportunity to rebut evidence presented by the appraisal district appraiser and quickly summarize the evidence. The ARB members strongly prefer you not repeat your entire presentation at this point.
After hearing the evidence, the ARB members will confer and make a decision. This decision is not subject to negotiation and they will not revise the decision if further evidence is presented. When this decision is announced, the hearing is effectively over. The ARB will send a letter two to four weeks later summarizing their decision and notifying the owner of a 45 day limitation from the date receipt of the ARB decision to either request binding arbitration or file a judicial appeal.
Binding Arbitration or Judicial Appeal
Beginning September 2005, owners of properties with an assessed value of $1 million or less may file a request for binding arbitration. The owner must file with the appraisal district no more than 45 days after receipt of the notice of the ARB’s decision. The binding arbitration option is interesting because it includes a loser pays provision. The appraisal district pays for the arbitrator’s fee if the final value is closer to the owner’s opinion of value, and the owner pays for the binding arbitration if the final decision is closer to the appraisal district’s opinion of value. Binding arbitration was passed to provide an alternative to judicial appeals, which can be expensive to prosecute.
Many owners pursue judicial appeals to further reduce property taxes. In 2005, O’Connor & Associates filed over 1,200 judicial appeals on behalf of property owners in the state of Texas. The judicial appeals can be expensive if the property owner and attorney don’t understand the process and have a plan in place to minimize the cost of legal and expert witness fees. Judicial appeals are typically successful. However, success requires cooperation from the property owner, such as providing responses to questions, documents and a deposition if requested. The judicial appeal is meaningful as an option to minimize property taxes since it reduces the base value. This is important because the appraisal district and ARB consider the base value in the subsequent year when setting the administrative hearing value.
Conclusion
Property owners can generate substantial reductions in property taxes by appealing annually. Consider appeals on both market value and unequal appraisal and obtain the House Bill 201 information when preparing for the appeal hearing. Property owners should consider all three levels of appeal: informal hearing, ARB hearing and judicial appeal/binding arbitration. While the ARB hearing and judicial appeal/binding arbitration can be an intimidating process, each is straightforward once you understand the mechanics.
If you are interested in a way to get involved in the real estate industry you should look into foreclosure investing. Many people avoid this type of investing because they are not aware of the details that go along with it. By simply learning about foreclosure investing, you will be able to join this industry in no time at all.
The first thing that you need to know about foreclosure investing is who you will be buying the house from. Foreclosed homes are properties that have been taken over by the bank because the past owner failed to pay his or her mortgage. When this happens, the bank then needs to sell the property back to the public so that they can start to collect a profit again. The longer that the bank sits on a foreclosed home, the more money they are going to lose.
Being that banks are always in a hurry to sell properties back to the public, the buyer definitely has a huge advantage; this is what makes foreclosure investing so profitable for thousands of people ever year.
When you are looking to get into foreclosure investing you should realize that you will be able to find properties that are greatly discounted. It is not uncommon for a buyer to be able to find a property for up to 40% off of the market value cost. By purchasing properties at this price and then selling them back to the public, you can make a lot of money.
Another reason that foreclosure investing is so popular is because there are a lot of these properties to go around. In almost every city in the United States there are foreclosure properties available for purchase. The only thing that you have to do when getting into foreclosure investing is find the homes that you want, and decide how much you are willing to pay for them. This can be done by simply scouring your newspaper, or joining a service that will supply you with homes in your area.
Overall, foreclosure investing is a huge industry at the present time. There are people all over the country that have turned their love of foreclosure investing into a full time job. If you are interested in getting involved with the real estate industry, there is no better way to do it than by investing in foreclosed properties.
There are many market predictions, however if you want to buy your first home—there is no wrong time. The motivation to buy is not determined by regional market conditions or by location. Industry opinions and investor speculation can not predict when a particular individual will be ready to buy. For the great majority of folks, the most compelling reasons to buy a home are based on individual circumstances and personal needs.
• Family needs and desires for children/parents/in-laws/couples
• Convenience to home, work, school, social activities
• Sense of achievement or fulfillment
• Freedom and independence
Even though there are many changes in the market, both up and down—people still need and want to buy homes. This desire to buy a home is deeply rooted in the fabric of our consciousness. The value of homeownership gives far more satisfaction than ROI calculators can quantify.
Today, there are many different loan programs with flexible terms to fit all buyers. There are city and county down-payment assistance programs to assist in buying a home. For future buyers with blemished credit, there are debt reduction and counseling programs to help gain a fresh start.
How do you make the leap to become a homeowner? First, determine that you want to buy a home. Get your finances in order. Determine your financial situation and check your credit to determine where you fall as a borrower. Look at all of your available assets for your down payment and examine all of the finance options available to you. If you have some credit blemishes, take the time to make timely payments to your creditors to present the best financial picture. Make sure that you have a track record of stability in your employment history. Postpone any major purchases. Your actual home purchase may still be 12-18 months down the road, but you can still prepare for it now.
Get pre-approved for your mortgage. Once you’ve cleared the financial hurdles, talk to your lender or broker to find out how much you can afford to borrow along with the expected out-of-pocket costs you will need to incur for the closing. This will include the required down payment along with funds for closing costs. If you are buying in a seller’s market, you may want to search for homes below your approved price range, so that you can have the most room for negotiation.
Find a credible licensed real estate agent. Look for an agent that can work with you based on YOUR needs and your schedule. Check references of previous clients. You may not know exactly what you want in terms of a new home, and your agent should work with you to determine your needs and help you find a property that meets your immediate and future needs. Check with family and friends for successful agent referrals. Ask them how satisfied they were with his/her services and if they would use them again.
Become an informed and practical buyer. Once you determine where you would like to live, determine what factors are most important for your family. Calculate your new commute time and research school information for your children. Make sure to evaluate the surrounding factors that are most important to you, along with factors that are least important.
Find a home that works for you. Envision yourself (along with your family living in the home). What are the key points of consideration for your home? If you spend a lot of time in the kitchen, then you want to make sure that the kitchen can accommodate your habits. If you will be working from home, make sure that your home office setup will work. Make sure that all of your telecommunications and electrical needs can be met.
Make the offer. Once you have located a property that meets your needs, make an offer based on the listing price, along with comparables information and market considerations. Your agent can work with you to determine the best price, along with any contingencies for the sale.
It is good to get a home inspection, so that you can know what the potential pitfalls and future maintenance needs may be. In a seller’s market, you may find yourself bidding with several other buyers for a single piece of property. Work with your agent to determine what is customary in your area. This is when negotiation skills really come in handy!
Once your offer has been accepted, you will enter an escrow period, where all of the title research will be handled, funding requirements met; tax and title transfer paperwork managed. Prior to the close of escrow, you will sign all of your finance paperwork, and pay your remaining deposit and closing fees. After funding is complete, the title company will record the new purchase deed with the County Recorder’s office, and you will officially “close”.
Congratulations! It’s time to move. Make sure to connect your new utilities along with mail forwarding. The purchase of a home can be a lifelong achievement, but one that is truly a worthy accomplishment.
As dreams are taking newer turns, so are our efforts to realize them. It is only natural for anyone to dream of a home of one’s own, where one can live with one’s loved ones and cherish all the dreams that one had regarding a home, sweet home. And to acquire this, one can actually do anything starting from laboring day in and day out for paying that sky-high mortgage, even compromising on several aspects of daily life. But what happens when you miss to repay one installment? They threaten your property for real estate foreclosure. However, unlike most things, you have this in your own hands and decide the fate of your own home by being able to avoid foreclosure auction, avoid losing home and short selling your property pre foreclosure.
Why would you do that? Property short sale means selling your property at a value less than what you owe your bank or the lender organization for the mortgage under question, that is, less than the loan balance, which is secured against the property. This way you can save a lot of your money, which otherwise you would have needed to pay the lender along with saving yourself and your loved ones from all the humiliation and embarrassment that facing foreclosure auction generally induces. Some times, you may end up selling your home at a rate higher than what you owe the lender entity, thereby saving some cash for yourself for future reference. This would not have been possible if you would have let the lender take complete charge of your property.
Why would it interest the lender? A very obvious question arises here as to why the lender entity would be interested in such a transaction where it is receiving less than what you owe him. The answer to this is simple, indeed. By compromising on a section of its due balance, the lender entity is basically saving a lot of its expenses that it would have to spend otherwise in conducting a lot of paper works, by carrying out the legal procedures of foreclosure, refurbishing the property, marketing it, finding the suitable investor and so on and so forth. Just the simple organization and execution of the property foreclosure auction could cost the lender as much as $50,000, which is not a sensible investment in the absence of an assured buyer or investor.
The question that follows is why any investor would like to buy a short sale property. The answer to this too is simple enough – a short sale property usually sells at very down to earth prices, which at times can get as low as 60% of the actual worth of the property. Moreover, with the increasing rate of foreclosure and the subsequent rise of property short sale, the real estate industry is booming all over the United States and is showing much promise to interested US and overseas investors. Investors can earn great profits on these short sale properties by buying them from the homeowners at a very humble rate and reselling them in the open market at standard industry rates.
Over the last two weeks, events have unfolded that have reminded me of an important truism in real estate investing.
“Always have a back-up!”
This was played out in dramatic form with a deal I’m closing tomorrow. A wholesaler friend of mine brought me this great little three bedroom one bath home tucked away on a dead end street where pride in ownership is alive and well. The electric and plumbing is already upgraded and this rehab is cosmetic with the exception of adding a bath.
I’m buying it for $52,500 and the as-repaired appraisal came in at $86,000. Not a bad spread. This is the kind of deal I like!
When I called my hard money broker, she was delighted and we moved quickly toward closing. I was only waiting on the closing time…
That’s when the wheels fell off.
It seems my broker’s money source decided he was only going to invest in property valued at $250,000 or more. Yikes!
So, I went to back-up hard money broker number 1.
The broker took his time…about 5 days…to finally tell me that he only wanted to loan about 60% of the as-repair value. No way. Not when I can do better (70%) with back-up hard money broker number 2.
Back-up broker number 2 is probably who I should have went with in the first place. I’ve borrowed from this source before. It took one phone call, and the money is there and I close in a couple of days. Wham-bam, the deal is arranged.
It looks like it’s time to shift around the players in my core team a bit. Back-up number 2 is now my starter. Back-up number 1 (foot-dragger, doesn’t-loan-the-70%-he-said-he-would) is benched.
I tell this story to illustrate that it’s absolutely CENTRAL to your business to have back-up plans in all aspects of the business.
I strongly recommend having two or three:
– Hard money brokers
– Appraisers for quick value assessments
– Rehab crew leaders
– Plumbers
– Electricians
– Roofers
– HVAC techs
– Realtors
In fact, have two or three of any trade or profession lined up, ready to spring into action as a moment’s notice. Sure, I have my favorites in each of these areas, but I am striving to have 3-deep hot back-ups in each. Thing happen. Life happens! Be prepared for it.
Don’t stop there. Have back-ups when you rent or sell a property. A property isn’t rented until the rent and deposit (or lease/option fee) is paid and the keys are in the hands of the new tenant. So, encourage back-ups until the money is in your hands (in cash).
I’ve had appointments set up to sign leases, and the potential tenants never show up, no call, and they quit answering their phone. This is despite being hot for the house an hour earlier! If you are in this business long, you will learn that people will disappoint you and they will fool you. So, establish policies and make one of them “it ain’t rented until it’s paid for!”
Encourage back-up offers to purchase. Deals fall through all the time! Take as many back-up offers as you can.
Having back-ups is a mental frame of mind that fits within being a big-picture thinker portion of the Mind of the Real Estate Investor. In addition, rearranging your core team is thinking big and long term. It’s a constant process of improvement and adjustment. This approach is crucial to your business! Apply this principle and profit!
